Achieving Ambitious Goals Through Marginal Improvement in Decisions

​In this post, we share a TEDx talk by a man who describes himself as “a guy who possesses no special gift of talent or skill”, yet he has successfully applied a system of decision-making to achieving amazing things in his life, across very different areas. In the video, Stephen Duneier covers an eclectic mix of his achievements, including: career success (in the investment management field), learning a new language, completing a half-marathon (the Pier to Peak), flying a helicopter, yarnbombing, and becoming a Guinness World Record holder. The video is roughly 18 minutes long.

What stands between us and achieving even our most ambitious dreams has far less to do with possessing some magical skill or talent, and far more to do with how we approach problems and make decisions to solve them”

His approach can be paraphrased as follows:

• break down a goal into its smallest elements
• make little changes to your routine to move towards your goal (in small steps)
• remove distractions, and repeat the small steps, making good tiny decisions via marginal adjustments
• via repetition, habits develop that are aligned with your goal
• upon reaching your goal, keep going with “bigger, more ambitious projects that require more… skills” 

You have to break this big ambitious goal down into these more manageable decisions — the types of decisions that need to be made correctly along the way in order to improve the odds of achieving the type of outcome you desire”

​Elements that struck us while watching his talk and researching his background:
1) Stephen used deep insight into who he is to design his strategy i.e. he knows what makes him tick. He says he knew he couldn’t “settle down and focus”, so he decided not to go against his nature and instead break his goals into tasks “that would require focus for just five or ten minutes at a time”. He also reiterates later: “I’m an undisciplined person”.
2) His approach can be applied to careers: “You take these big concepts, these complex ideas, these big assignments, you break them down to much more manageable tasks, and then along the way, you make a marginal improvement to the process that ups the odds of success in your favour... I’m going to try and do this in my career.”
3) Efficient use of time e.g. using his time while commuting to learn a new language (again, he knew himself, and deleted the potential distraction of music from his iPod)
4) Even the smallest decisions matter: “if you don’t make the right decision when you’re on the couch, there is no decision that occurs at the top of the mountain”.

An example from the world of tennis: Novak Djokovic
In the talk, Stephen discusses how when Novak Djokovic improved the percentage of points he won (his “decision success rate”) from 49% to 55% over more than a decade, it lead to a major improvement in outcomes (the percentage of matches won) and his resulting earnings. 

Novak was mentioned in a previous Protagion post about superstars and coaches, and was again winner of the Wimbledon Men’s Singles title in 2018.

Application to Investment Management
Those in the investment management industry will recognise that the same principle applies there. Small improvements to the decision success rate (i.e. picking better investments at instrument level) have significant impacts on ultimate outcomes over time (i.e. alpha generated or return achieved). In fact, as Stephen’s business Bija explains: “Investment management is the business of decision-making. Your results are a function of your ability to make good decisions, consistently. Due to the continuous and compounding nature of decisions, even a marginal improvement in the decision-making process can have a huge impact on your results. Therefore, the goal is to nudge the odds of a successful decision in your favour, each and every time.”

Bija is a consulting firm which “advises experienced hedge fund managers, Chief Investment Officers (CIOs), and asset allocators” by “incorporating cognitive science into investment management”. It calls this coaching “Performance Enhanced Investment Management”, and builds on Stephen’s own experience of professional investment management including as “founder and CIO of two award-winning hedge funds”. 

More on decision theory & decision-making
At Bija, Stephen positioned himself as a “decision architect”, applying the science behind decision-making. He’s also lectured undergraduate and graduate level courses in California on Decision Analysis and Decision Theory too.

As there is a gap between how we actually make decisions, and how we should make decisions (optimally), Bjia’s speciality is developing “tools and processes to help decision-makers close the gap”. There are three reasons for the gap:

• Lack of understanding of how statistics should be applied and/or interpreted
• Reliance on intuition and gut feel which leads to judgement errors and predictable irrationality
• Reluctance to experience the cognitive strain required to overcome our biases

Bija calls these reasons “ability”, “cognitive bias” and “motivation” respectively, and believes that we can design processes to alter the environment in which we make decisions, which both reduces our vulnerability to cognitive bias and means we need to expend less energy on overriding our natural reactions. By recognising when we are most vulnerable to mistakes, and applying behavioural psychology to understand the circumstances, we can devise solutions to reduce the likelihood of mistakes occurring. And, more successful decisions compound into greater long-term outcomes.

Because of the continuous and compounding nature of all those millions of decisions that we face on a regular basis, even a marginal improvement in our process can have a huge impact on our end results”